36 Pages Posted: 15 Mar 1999
Date Written: November 1998
In this paper we review the academic evidence on earnings management and its implications for accounting standard setters and regulators. We structure our review around questions likely to be of interest to standard setters. Specifically, we review the empirical evidence on which particular accruals are used to manage earnings, the magnitude and frequency of any earnings management, and whether earnings management affects resource allocation in the economy. Our review identifies a number of important opportunities for future research on earnings management.
JEL Classification: M41, M43, M44
Suggested Citation: Suggested Citation
Healy, Paul M. and Wahlen, James Michael, A Review of the Earnings Management Literature and its Implications for Standard Setting (November 1998). Available at SSRN: https://ssrn.com/abstract=156445 or http://dx.doi.org/10.2139/ssrn.156445
By Ron Kasznik